Outsourcing in Telecommunication Companies: a Comparative Study of Airtel Kenya and Orange Telecom

Abstract

The International business environment has forced many organizations in the whole world to embrace innovative ways of doing businesses. Outsourcing the company’s non-important business processes has been part of the strategic positioning to achieve a competitive edge by the companies. The research was aimed at to determine the effect of outsourcing practices on performance of Airtel and Orange Companies. The study fundamentally focused on the following five key variables i.e. Business process outsourcing (BPO), Managed service provision, Out-tasking, Tactical outsourcing and Transformational outsourcing. The study was a comparative study of Airtel and Orange Telkom companies in Kenya whereby judgmental sampling was applied to interview the directors, head of departments and other senior staff from the two companies. From the study, the two telecommunication companies outsourced work using multiple outsourcing practices. Outsourcing non-core activities and to cut down operational cost and to handle sudden spikes of work were found to be the reasons for outsourcing. Out-tasking and tactical outsourcing were found to be the widely used practices of outsourcing. The companies interviewed reveal that employing outsourcing practices in diverse approaches vis a viz size of the organization. Outsourcing is seen as a way of bringing down cost and a strategic plan to improve organizational performance and outsourcing can also come with management challenges like; continuous competency improvement. Finally, the results showed that the two companies indicated that outsourcing brought in many benefits to the performance of the company as compared to the challenges. The findings of the study are relevant to management as it will enable the management of Airtel and Orange to know the influence that outsourcing has on the overall company performance. The policy makers are in a good place to make critical decisions those can change the sector positively using the information gathered herein. The policy maker can change the dynamics of outsourcing in the sector using the information of this study thus formulate policies that spur outsourcing in the telecommunication industry to grow and enhance efficiency. The current study concluded that, Product knowledge, minimisation of cost, and availability of human intellect are the main factors leading to outsourcing decisions in many companies where the same reasons apply to the telecommunication sector.